Stop Digging Down
A recent report from Redfin highlighted a startling trend in the real estate market:
Home delistings have increased by 28% across the US. As the report notes, "sellers pull homes off the market rather than settle for low prices."
We are seeing a wave of homeowners retreating because the market isn't giving them the number they want. But as your advisor, I want to offer a different perspective on why "waiting it out" might be the wrong move.
Stop Digging
If you are one of the people who have pulled your home off the market because you aren't getting your desired price, I’d encourage you to reconsider. If you’ve found yourself in a financial hole, the best thing you can do is start digging yourself out—not keep making the hole bigger by holding onto an asset that is draining you.
It’s Just Like a Stock
Real estate carries a lot of emotion, but financially, it plays by the same rules as the stock market. People often get fixated on a past number: "Well, it was worth way more last year, so I have to wait until it comes back."
No, you don’t.
A home, like a stock, is worth exactly what someone else is willing to pay for it at that given moment—not what you paid for it, and not what Zillow said it was worth six months ago. It went down for a reason.
Either:
It was overvalued in the first place and is simply returning to a normal, fair price, or
The economy is struggling. If this is the case, things are likely to worsen before they improve. Holding on only risks digging an even larger hole to climb out of later.
Don't Be Afraid to Step Back
Ultimately, if you need to move, then you need to move. Don't shy away from taking a small step backward financially if it allows you and your family to take the necessary steps forward in your lives.
If you’re stuck with these decisions, there’s a good chance you don’t have a plan, otherwise you’d be following it and making the best long-term decisions, or you have one, and it may just need to be refreshed for where you and your assets/liabilities are today.
Process - I need/want to move to improve my family situation, quality of life, financial burdens, etc.
Prediction - “The market will come back.”
Process over predictions.
Shean